Having a large down payment can make it easier to buy a home. But if your savings account isn’t where you’d like it to be, that doesn’t mean you can’t come up with a solid down payment; you just might need to think outside of the box.
So what are some out-of-the-box strategies you might be able to use to get the down payment you need to buy your dream home?
A recent article from realtor.com outlined lesser-known strategies potential homebuyers can leverage to come up with a down payment, including:
- Tap into your IRA. If you’re a first-time homebuyer, you can withdraw money from your IRA for a down payment, without having to pay the 10 percent early withdrawal penalty or restore the funds to your account. (Just keep in mind you will have to pay taxes on whatever you withdraw from your account.)
- Explore assistance programs. Many cities, states, and nonprofit organizations offer down payment assistance programs to help certain types of people (for example, teachers, civil servants, or people below a certain income threshold) successfully purchase homes. Do your research to see if you qualify; if so, you may be able to get a solid portion of your down payment covered, which will make it easier to buy a home.
- Talk to your employer. Some companies have employee-assisted housing programs that offer employees low-interest (or even zero-interest!) loans to help them purchase a home. While this certainly isn’t a perk that every employer offers, if you think it may be something your company offers, talk to your supervisor or human resources department to see if you qualify.